Mangat Rai Vs. State of Madhya Pradesh
 INSC 214 (1 September 1969)
Madhya Pradesh General Sales Tax Act 1958 (2
29(2), (3) and (4)-Power of search and
inspection of account books-If Sales Tax Inspector entitled to remove
obstruction- If amounts to "seizure"-Meaning of "seizure"
in s'. 29(3).
Section 29 sub-section (2) of the Madhya
Pradesh General Sales Tax Act provides in part that all accounts relating to
the stock-in-trade of any dealer shall be. open to inspection by the
Commissioner; and for this purpose sub- section (4) empowers the Commissioner
to search any place of business of the dealer. The Sales Tax Inspector visited
the shop of the appellant fox a surprise check and wanted to inspect his account
books. When the Inspector tried to prevent removal of the books in a
clandestine manner by forcibly taking possession of them, the appellant used
criminal force and was subsequently convicted under ss. 353 and 506(1) I.P.C.
In appeal to this Court it was contended that the Act did not authorise
forcible inspection of accounts and that the Inspector was exercising powers of
seizure under s. 29(3) of the Act which he did not have.
HELD: Dismissing the appeal, If the powers
under sub-section (2) 'and (4) are. read together, it would mean that the
Commissioner is entitled to search and take hold of the account books even if
the assessee does not place the account books before him. If the Commissioner
does so, he cannot be said to seize the account books. In the Act
"seizure" means that the Commissioner should take into possession the
account books and take, them outside the possession of the assessee. [156 E--G]
In the present case the Sales Tax Inspector having seen the account books in
the hands of the assessee was entitled to demand that the account books be
shown to. him and if he did forcibly try to take possession of them, he was
only attempting to enforce his right of inspection. He cannot be said to have
attempted to seize the account books within the meaning of s. 29(3), for, the
object was not to dispossess the trader but to hold the books for a temporary
period for the purpose of inspection. [157 E--F] The observation contra in
Hazari Lal v. State of Bihar  Supp. ?. S.C.R. 419 at 425, held obiter,
Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhovar 66 I.T.R. 664,
671 and N.P. Sharma v. Satish Chandra  S.C.R. 1077; 1096 referred' to.
CRIMINAL APPELLATE JURISDICTION: Criminal
Appeal No. 189 of 1967.
Appeal by special leave from the judgment and
order dated September 4, 1967 of the Madhya Pradesh High Court in Criminal
Appeal No. 492 of 1964.
A.S.R. Chari, B.P. Maheshwari and Sobhag Mal
Jain for the appellant.
I. N. Shroff, for the respondent.
The Judgment of the Court was delivered by
Sikri, J. In this appeal by special leave the principal question which arises
is whether a Sales Tax Inspector inspecting the accounts under the Madhya
Pradesh General Sales-Tax Act, 1958 (No. 2 of 1959) hereinafter referred to as
the Act is entitled to remove obstruction to the inspection of account books;
in other words, if he attempts to remove the obstruction is he acting in the
execution of his duties as such.
The facts are not in dispute. On October 24,
1959, Krishan Sahai, Sales Tax Inspector, P.W. 1, alongwith Shri N. J.
Warudkar, P.W. 5, and Shri Harikishan Gupta, P.W. 2, went to the shop of the
appellant Mangat Rai, run under the name and style "Mangat Rai Ram
Kumar". The officer visited the shop for a surprise check. He informed the
appellant that he wanted to inspect his account books.
At that time they were in the verandah which
is common to the shop of the appellant and the neighbouring shop of Munshiram.
It is perhaps best to describe what happened in the words of the Inspector:
"I entered the shop of the accused for
inspection and Shri Warudkar entered the shop of Munshiram. The accused,
Harikishan and I all three entered the shop of the accused.
I and Harikishan sat on the Gadi of the
accused and the accused Mangat Ram sat near the iron-safe. I asked the accused
person to show his account-books for inspection. Many account-books were kept
there. He took out 3 note-books of the size of exercise-notebooks out of them.
I thought he was taking out them for showing the same to me for inspection.
In the meantime Dayakishan who is the son of
the accused also came into the shop. The accused kept one notebook as it was
and he handed over the remaining two note-books to his son and asked him to
rule away for keeping the same at his house.
When the accused was turning the pages of the
note-book I noticed that it contained accounts therefore, suspicion came to my
mind and I demanded these note-books from that boy for inspection. That boy had
the exercise-book in his right hand. I tried to snatch away the exercise book
by catching hold of 153 his left hand. When I had caught hold of that boy with
my left hand the accused caught hold of my right hand and pulled me to the back
side by giving me a jerk as a result of which my shirt got torn and the boy ran
I tried to get separated from the grip of the
accused so that I would be able to catch the boy but in the mean-time the
accused caught hold of my waist with his both the hands and said, "Do not
touch the exercise-books. It would be dangerous." In cross-examination it
"When the accused was turning the pages
of both the account-books with which the boy was running away "I noticed
that 'Business transaction' was written therein." The Magistrate who,
tried the: case convicted the appellant under s. 353 and under s. 506(1) of the
Indian Penal Code.
The learned Sessions Judge held that the
Sales Tax Inspector "had not required the accused to produce those copy
books for checking and inspection and as he was not authorised to seize them,
his attempt to hold the boy and relieve him of the copy books was not in the
discharge of his public duty and therefore the accused cannot without doubt be
held guilty of an offence under section 353 Indian Penal Code or even 352
Indian Penal Code." The State filed an appeal under s. 417 of the Criminal
Procedure Code. The High Court came to the conclusion that the Sales Tax
Inspector was certainly within his statutory authority to demand inspection of
the copy books kept in the shop and if some of the books were sought to be
removed in such clandestine manner, it would be idle to contend that the Sales
Tax Inspector would have no power to prevent evasion of inspection and
commission of an offence in his very presence. In the result the High Court allowed
the appeal and convicted Mangat Rai under s. 353 and s. 506(1) and sentenced
him to rigorous imprisonment for four months on each count, the sentences to
The learned counsel for the appellant, Mr.
Chari, contends that the Act contemplates voluntary submission to inspection
and that there cannot be any forcible inspection of accounts. He says that if
there is any obstruction to inspection it may be punishable under s. 46(h) of
the: Act, but the Sales Tax Inspector cannot do anything to forcibly inspect
the accounts. He urges that what has happened in this case is an attempt on the
part of the Sales Tax Inspector to exercise the powers under s. 29 (3) of the
Act, and it is common ground that the Sales Tax Inspector did not have power to
act under s. 29(3).
Sup CI --70 - 11 154 In order to appreciate
the arguments of the learned counsel it is necessary to set out the relevant
provisions of the Act and the Rules.
"Madhya Pradesh General Sales Tax Act S.
29. Production and inspection of accounts and documents and search of premises.
(1)The Commissioner may, subject to such
conditions as may be prescribed, require any dealer to produce before him any
accounts, registers or documents, relevant to the financial transactions of a
dealer including accounts, registers or documents relating to profits derived
from the business of any firm, or to. furnish any information, relating to the
stock of goods of the dealer, or purchases, sales or deliveries of goods made
by him, as may be necessary for the purpose of this Act.
(2) All accounts, registers and documents
relating to the stocks of goods of any dealer, or to purchases, sales or
deliveries of goods made by him and all goods kept in any place of business or
warehouse of any dealer shall, at all reasonable times, be open to inspection
by the Commissioner.
(3) If the Commissioner has reason to suspect
that any dealer is attempting to evade payment of any tax, he may, for reasons
to be recorded in writing, seize such accounts, registers, or documents of the
dealer as he may consider necessary and shall grant a receipt for the same, and
shall retain the same only for so long as may be necessary for examination
thereof or for a prosecution.
(4) For the purpose of sub-section (2) or
subsection (3), the Commissioner may enter and search any place of business or
where house of any dealer." "Madhya Pradesh General Sales Tax Rules
54. Notice of inspection. Unless the
inspecting officer in his discretion deems it necessary to make a surprise
visit, he shall give reasonable notice in writing to the dealer of his
intention to inspect the accounts, registers, documents or stocks of goods of
such dealer and in fixing the date, time and place for the purpose 155 shall,
as far as possible, have due regard to the convenience of the dealer.
55. Retention of seized books of accounts
registers and documents. If the inspecting officer seizes any books of
accounts, or documents under section 29, he shall give a written
acknowledgement of the same specifying in brief the articles so seized. He
shall not without recording in writing the reasons retain them for more than
twenty-one days." A similar section was construed by this Court in
Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver(1). The section
which came up for interpretation was s. 41 (2) of the Madras General Sales Tax
Act (1 of 1959), which reads as follows:
"41(2). All accounts, registers, records
and other documents maintained by a dealer in the course of his business, the
goods in his possession and his offices, shops, godowns, vessels or vehicles
shall be open to inspection at all reasonable times by such officer:
Provided that no residential accommodation
(not being a place of business- cure-residence) shall be entered into and
searched by such officer except on the authority of a search warrant issued by
a Magistrate having jurisdiction over the area, and all searches under this
sub-section shall, so far as may be, be made in accordance with the provisions
of the Code of Criminal Procedure, 1898 (Central Act 5 of 1898)." The
contention of the respondent in that case was that the provisions did not
authorise search of premises but merely provided for inspection thereof at all
reasonable times by the empowered officer. This Court observed:
"Though, therefore, the word 'search'
has not been used in sub-section (2) these two powers of entering the offices,
etc., for inspection and of inspecting every kind of account maintained by a
dealer with respect to his business together amount to giving the officer
'concerned the powers to enter and search the offices, etc., and if he finds
any account in the offices, shops, etc., to inspect them. Otherwise, we can see
no sense in the legislature giving power to the empowered officer to enter the
offices, etc., for the purpose of inspection as the officer concerned would
only do so for the purpose (1) 66 I.T.R. 664, 671.
156 of finding out all accounts, etc.,
maintained by the dealer and if necessary to inspect them for the purposes of
the Act. We cannot therefore agree with the High Court that there is no power
of search whatsoever in sub- section (2) because the sub-section in terms does
not provide for search.
Similarly, the officer has been given the
power to inspect the goods in the possession of the dealer. He has also the
power to enter the dealer's offices, etc., for the purpose of such inspection.
Combining these two powers together it follows on the same reasoning that the
officer has the power to search for the goods also and to inspect them it found
in the offices of the dealer. We have therefore no hesitation in coming to the
conclusion that the power of search is implicit in subsection (2) with
reference both to the accounts, etc. maintained by the dealer and the goods in
the possession of the dealer." We have referred to the above case, which
was not cited at the bar, in order to show that there is no rule that
provisions like this should be construed very strictly. In the present Act
there is a special provision s. 29(4) which enables the Commissioner to enter
and search any place of business or where house of any dealer for the purpose
of sub- s. (2) of s. 29. If the powers under sub-ss. (2) and (4) are read
together it would mean that the Commissioner is entitled to search for the
account books even if the assessee does not place the account books before him.
If the Commissioner searches and takes hold of account books for the purposes
of inspection it is difficult to say that he is seizing the account books
within the meaning of sub-s. (3) of s. 29. Search for inspection implies taking
possession of the account books for the purpose of inspection. In the Act
'seizure' means something different because here seizure means that the
Commissioner would take into possession the account books and take them outside
the possession of the assessee.
The learned counsel referred to us the
decision of this Court in Hazari Lal v. State of Bihar(1), where this Court
"In our opinion merely holding books
found lying in the premises for perusing them cannot properly be regarded as
seizure because seizure implies doing something over and above holding an
article in one's hand.
According to Shorter Oxford Dictionary,
seizure, among other things, means ' ....
confiscation or forcible taking possession
(land or goods); a sudden and forcible taking hold.' As already stated, Mr.
Singh (1)  Supp. 1 S.C.R. 419, 425. ? 157 merely picked up the books
which were lying in the shop and did not snatch them away from anyone nor did
he take them by force. On the contrary they were taken away by force by the
appellant. If, indeed, he had retrieved them by force it may have been possible
to urge that latter act of his amounts to seizure." In our opinion the
last sentence quoted above is an abiter, and we must examine the question
independently whether the attempt made by the Sales Tax Inspector in this case
to take possession of the account books from the hands of the appellant's son
amounts to seizure or does it amount only to an attempt to enforce his right of
It seems to us that if we were to accept the
contention of the learned counsel for the appellant we would be nullifying the
power of inspection and search contained in s. 29(2) and (4) of the Act. Any
assessee who does not want to show any particular book or if he finds that the
Sales Tax Inspector has got hold of a book, which might prove damaging to his
case, the assessee could snatch away or ask his clerk or son or relation to
snatch away the book and run away leaving the Sales Tax Inspector helpless to
do anything in the matter.
In our view the Sales Tax Inspector having
seen the two books in the hands of the assessee was entitled to demand that
they be shown to him and if he did forcibly try to take possession of them it
cannot be said that he attempted to seize the account books within the meaning
of s. 29(3) for the object was not to dispossess the trader but to hold the
books for a temporary period for the purpose of inspection. If s. 29(4)
authorises him to search business premises for the purpose of inspection it
implies that he can get hold of the books in respect of the business of the
assessee. As observed by this Court in M.P. Sharma v. Satish Chandra(1) these
powers are given to the Sales Tax Inspector for the protection of social security.
This Court observed that "a power of search and seizure is in any system
of jurisprudence an overriding power of the State for the protection of social
security and that power is necessarily regulated by law." The learned
counsel urges that the appellant was entitled to exercise his right of private
defence of the person of his son. We are unable to sustain this contention. The
son was clearly committing an offence under s. 46(h) of the Act and in these
circumstances we are unable to appreciate how any question of private defence
(1)  S.C.R. 1077; 1096.
158 In our view the Sales Tax Inspector was
acting in execution of his duty as a Sales Tax Inspector and the appellant used
criminal force against the Sales Tax Inspector. Further he intended to deter
the Sales Tax Inspector and prevent him from discharging his duty as a public
In the result the appeal fails and is
R.K.P.S. Appeal dismissed.